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Takeaways:
- Millennials want to buy homes, but they aren’t.
- How do millennials view the homebuying process?
- Four characteristics of a potential millennial homebuyer.
If you haven’t already, Google “millennials real estate” and take a look at the results. What you come across immediately will be dozens of articles wrested from reams of data and simple thought experiments diagnosing how young buyers are transforming the market or underperforming at the same time.
Showing up at the table, finally, or not buying. Stuck renting, exploding, traditional, tech-obsessed, cheap, frugal — the descriptions go on and on.
Everyone is looking into the crystal ball and trying to figure out how to sell to this new generation of homebuyers whose priorities and spending habits seem so mysterious. And more than anything else, there are a lot of questions with not a lot of concrete answers.
The stats don’t lie: Young people want to buy homes, but in many cases aren’t. Even with a lower percentage of people participating in the market than usual, according to the National Association of Realtors, millennials are now leading other generations in total homebuying by sheer numbers.
We (myself included) are also statistically the generation most likely to hire a real estate agent. As the job market strengthens and more of Generation Y starts settling down, thousands more qualified buyers will be shopping for homes nationwide.
An excellent opportunity exists for people who understand the nuances of the soon-to-be-monumental millennial housing market.
Connecting with younger homebuyers involves more than just keeping an updated blog and texting instead of calling (though, really, please text).
It involves first engaging with how millennials view homebuying as a whole and learning now to navigate their current hangups:
1. Self-reliance
Millennial homebuyers have access to dozens of self-directed ways to get information. With access to online resources and social media networks, millennials are more likely to take a firsthand look at houses, the buying process and agents on their own first.
Yes, this means calling mom and dad when needed, but it also means getting information from people who have proven themselves to be thought leaders and through trusted brands.
One of the biggest battles facing agents who don’t have a personal recommendation is trust.
Millennial photo via Shutterstock
2. A wealth of data
Thanks to the Internet, there is more information available to homebuyers than ever before. In the years before Zillow and Trulia, the real estate agent was the sole trusted adviser when it came to home prices, neighborhood trends, features and more.
While that is still a big part of the agent’s role, increased access to information on any home — any time — means your buyer shows up knowing what he or she wants — often down to a property — and more importantly, why.
Which is great because it can save you a lot of time and lead to a quicker sale — but only if you’re ready.
3. Skepticism is high
It’s exceedingly important to understand where millennials are coming from. For many people in my generation, our first experience with real estate came from watching the housing market go into free-fall in a wave of foreclosures and ruined lives.
A lot of people are highly wary of scams and fearful that in the event of another downturn they will end up losing their investment, too. This fear is unfortunate, especially considering all the current incentives to homeownership offered by low mortgage rates (and high rental prices).
Even for millennials who have wholeheartedly decided to buy a home, the anxiety around being scammed makes them wary of people they don’t trust and more likely to strike out on their own with their search.
4. Love brands, hate “advertising”
Having spent our whole lives in a world saturated with scientifically optimized marketing, millennials are extra-savvy when it comes to understanding when and what we’re being sold.
We’re also, by and large, strongly resistant to being sold to in traditional ways — as many iconic brands are struggling to discover.
On the other side of the spectrum, we are also highly connected with companies we like, as well as willing to tell their network of friends, acquaintances and even strangers about positive experiences we have. A bus stop ad means less when stacked up against the strength of Yelp reviews.
Stay tuned tomorrow for Part 2, which will cover how to reach millennial homebuyers.
Nicholas Brown is a Los Angeles-based writer for JustRentToOwn.com. You can follow his Twitter at @justrenttoown or check in at his blog.